CMD, MSTC Limited Speech in 53rd Annual General Meeting at Kolkata
Ladies and Gentlemen,
I heartily welcome you all to this 53rd Annual General Meeting of the Company. I am privileged to share my thoughts with you through this forum. Since, the requisite quorum is present I hereby declare the meeting as open.
Necessary documents/ register in compliance with the provisions of the Companies Act, 2013 are lying open at the meeting venue and shall remain open and accessible during the continuance of the meeting.
The Annual Financial Statement and the Board’s Report have been sent along with the notice of the meeting and presume you have spared some part of your valued time to read.
Though the physical performance in terms value was encouraging,the revenue generated was not proportionate due to various reasons. One of the reasons was pressure for reduction of service charges by our clients.In spite of the same the Company ended the financial year with PBT of Rs. 111.59 Crore compared to Rs. 96.61 Crore during the previous year.
MSTC plays a very important role as a service provider in e-commerce and is a market leader in this sector. It has the distinction of serving majority of Central/PSUs/State Govt. Department and Private Institutions for providing transparent, fair & seamless e-Commerce services to its clients.
Joint Venture for Shredding Plant
During the year MSTC has formed a Joint Venture Company “Mahindra MSTC Recycling Pvt. Ltd.” with Mahindra Intertrade Ltd., to set up the first Auto Shredding Plant in India for which input raw materials like condemned automobiles, white goods, etc. are required. A collection and dismantling centre with state-of-the-art technology has been set up in Greater Noida as a supply feedstock for the main Auto shredding plant. Foundation work for the shearer cum baler in the plant is completed.Hydraulic Scissor will also be ready.
Friends, your continued trust, encouragement and support drive us to improve our performance. We are committed to participate in improving the livelihood of communities and societies at large. We take up various kinds of social development projects, mostly in rural areas. Your company has given special thrust in health care, cleanliness, and primary education and in future continued to work for the upliftment of society at large.
As you know your company is a major standalone e-commerce company in the country. The area includes selling agency business, e-sales of scrap and other commodities, e-procurement etc. Customized e-commerce solutions have emerged as major innovative business models of MSTC. Here we have developed Exim Portal for Petroleum Industry, Online Draw System for selection of LPG dealership, e-Rakam (e-RashtriyaKishanAgriMandi) Portal etc. to name a few.
E-auction of sand Mining blocks in UP and exim-products of IOCL have been the signature events in the recent past.
In trading business, which comprise of import and import financing through BG backed model contributed to 35% of the total operational income. MSTC also supplied imported coal worth Rs. 272 Crore to power generating companies.The trading business has contributed 35% of the total operational income of the Company.
Ladies & Gentlemen, we all know that North East Region is rich in forest wealth constituting 22.21 percent of total forest area in the country. Agro Climatic condition favors growth of niche variety of fruits, vegetables, timber, spices and other products.In line with the “Look East” and “Act East” policies of the Government of India, MSTC has taken many steps with a view to benefit the farmers which will subsequently benefit the entire North East Region. MSTC and other stakeholders including NABARD, NERAMAC, CRWC, FPOs, etc. are working together for overall development of the Agri-horti Eco-System in the North East Region. I am delighted to inform you that MSTC plans to enter into umbrella agreement with the State Government of the North East states for providing complete e-commerce solutions with a focus on Agri-horti products.
The recent initiative of the Government for sale of mineral blocks, both major and minor, through e-auction has also opened window of opportunity for MSTC and it has signed agreement with most of the State Governments which may yield positive results to the exchequer of states and fetch revenue to MSTC.
MSTC has signed an agreement with NAFED to sell the food grain lying with various godowns in the country through e-auction. Procurement of the same is also within the ambit of agreement through e-reverse auction. This offers a huge opportunity for MSTC for e-Commerce business.
E-procurement is another potential area in which MSTC is making a rapid stride to grab the business. MSTC has introduced multi browser facility to make much deeper dent in the e-procurement domain of business.
Economic and Business Environment
Dear Friends, MSTC’s business is having the following opportunities and threats:
i) E-Commerce: MSTC has emerged as a major standalone e-commerce service provider in the country. With its foray into new and diverse business verticals including the flagship projects of the Govt. of India, it has an immense potential to grow multifold in this arena.
ii) Recycling Sector: MSTC is spearheading the initiatives of framing a recycling policy, its pivotal role in setting up recycling plant in the automobile sector and e-waste throws open many opportunities for MSTC to be the front runner holding the torch for growth.
iii) Foreign footprints – Exim of petroleum products: MSTC has added one more feather to its cap by developing an exclusive portal for the import and export tenders for OMCs for its petroleum products digitizing the entire process with its complexities. The portals services are to be extended to its overseas Joint Venture units empowering MSTC to make its footprints overseas in the days to come.
iv) Listing - MSTC is slated to be listed in this fiscal year which will increase its visibility and thereby its business.
i) GeM portal – reducing opportunity in exposure:
With the Govt.’s directive to use the GeM Portal for purchases, the business in e-procurement of goods will take a hit. The scope of work in e-procurement gets a bit downsized, as a major percentage of any Corporation’s business is spent on procurement of goods.
ii) Trading business: As a policy matter, MSTC has decided to go safe in the traditional trading business due to the extent of risk involved. Though it is making efforts to resurrect the same, the slowness of the economic growth and the exponential increase in NPAs etc has destabilized the credit system and it poses a difficult scenario.
I am glad to inform you that this year, with continuous follow up, we have collected the bank accounts of shareholders and for the first time, dividend shall be credited to bank accounts. Out of 544 shareholders, around 400 have given bank details and we will issue dividend to their Bank Accounts, for the rest, we will issue dividend warrants.
The Company’s shares have been dematerialised in both the depositories, i.e., NSDL and CDSL.335 shareholders out of 544are holding shares in demat mode. I would like to request all the shareholders to get their shares dematerialized. Shareholders are also requested to update their bank account with the company so that dividend can be transferred to their account directly. We do not have any record of a single shareholder grievance in the last decade.
As mentioned earlier, the Government of India has decided to disinvest around 25% of their holding in the Company through IPO.The Lead Manager & Legal advisors havealready been appointed. We hope to enhance the shareholders value in the coming years too.
Your Company is an ethical and properly governed company. All actions are transparent and taken with reasons and keeping in view the interest of the stakeholders. We follow all guidelines of the Government and also the law. We have been rated as “excellent” in the CG rating done by DPE every year. We have not received any notice of non-compliance from any authority in last 10 years.
Your Board has nine Directors, comprising of two Govt. nominee and four independent directors, which makes the Board decision making process more analytical, reasonable and logical.
Your company is pro-employee company and has bagged award for “great place to work”. The industrial relations have remained cordial and participative all along. We have opened offices in many cities in India so that we can reach out to our principals and customers easily and generate more business. Therefore we have recruited officers for expansion of business.
I can assure you, on behalf of the management that with prudent and experienced Board members, an efficient and loyal manpower and sound financial resources, we are managing the affairs in the most reasonable way keeping in view the interest of the stakeholders.
I would like to place on record my gratitude to the Hon’ble Union Minister for Steel, Secretary (Steel), Additional Secretary and FA (Steel), and other officials of the Ministry of Steel, Defence Ministry, Coal Ministry, Mining Ministry, Civil & Aviation, Petroleum, Natural Gas Ministry and various other Central Government Ministries, all State Governments, various Central and State Public Sector Undertakings, private companies, the bankers, our principals and others for their valuable assistance and guidance extended to the Company during the year. I also express my gratitude to all stakeholders, customers and suppliers for the trust and confidence reposed by them on your Company year after year and assure you that we shall continue to create more value for our stakeholders.
Best wishes for Durga Puja and Diwali.
Kolkata B. B. Singh
26thSeptember, 2018 Chairman-cum-Managing Director